Arena Pharmaceuticals (ARNA) is one of the three top contenders in what can be considered a weight loss drug battle royal. The Arena weight loss drug Lorcaserin is currently under FDA review. If approved it will be Arena’s chance to make some capital.

The fact that Arena stock has risen 81% in the last three months leads me to think that many investors did not learn from their mistakes with Lorcaserin in the past. My cardinal rule in biotech investing is never invest money in a "promising" drug that does not have FDA approval. Drugs can so easily pass clinical trials and then be denied by the FDA for many different reasons. The history of Lorcaserin is just that. The FDA denied approval of Lorcaserin in 2010 and Arena had to take it back to redevelopment.

I urge investors to take this into consideration; just because Lorcaserin failed once and has been redeveloped, does not mean it will not fail FDA review again. That being said, should Arena’s weight loss drug become FDA approved, an upside is in store due to the timing and effectiveness of the drug compared to its competitors.

Arena has a 52-week range of $1 to $4 and a market capitalization of $506 million. Arena will see competition from the weight loss drug Contrave, created byOrexigen Therapeutics (OREX). Orexigen has a 52-week range of $1 to $5 and a market cap of $271 million. The third company that Arena will have to compete against is VIVUS (VVUS) and its weight loss drug Qnexa. VIVUS has a 52-week range of $6 to $25 and a market capitalization of $2 billion. Arena is in relatively good standing against its competitors. Concerning the timeline of when each weight loss drug will hit the market, Arena and VIVUS will get their drugs out first followed by Orexigen, so Arena has the advantage.

VIVUS’ drug Qnexa seems to be the biggest competition for Arena’s Lorcaserin. A big break for Arena was caught when the FDA recently released its decision to take another three months to review Qnexa before it passes judgment on the drug’s future. Originally set for April 17, VIVUS had planned to get its weight loss treatment out on the market first allowing Qnexa to corner the market. The date is now set to July 17. This allows Arena to get Lorcaserin approved around the same time, which will help draw more press and investor attention.

What it will come down to for Arena and VIVUS’ success depends on which company has the better drug overall. Here are the facts for the Qnexa and Lorcaserin. Qnexa studies have shown that it works very well. A 52-week study involving 2,487 patients across 93 U.S. sites showed that 48% of patients taking the high dose Qnexa and 37% taking mid-dose Qnexa lost greater than 10% of their body weight, and the rest of the patients lost greater than 5% of their body weight. A continuing study of the same patients extended the study an additional 52 weeks, which showed another average weight loss of 9% more from patients’ body weight at the end of the first study. Lorcaserin studies showed that after 52 weeks 16% of patients (7,800 patients enrolled) taking Lorcaserin lost over 10% of their body weight. Furthermore, both drugs saw a significant decrease in lipid levels and risk of type-2 diabetes. Qnexa and Lorcaserin have both been denied FDA approval once and both drugs are set to hit the market at the same time after review. Therefore, the drug that will rise over the other is based solely on effectiveness. I think that the clinical results convey that Qnexa is the better of the two.

Orexigen’s weight loss drug Contrave has passed phase 3 trials and is currently fulfilling the new drug application stage. Like Qnexa and Lorcaserin, Contrave has also been denied FDA approval in 2010. The Contrave studies showed pretty positive results. After 52 weeks 56.3% of 702 patients lost greater than 5% body weight, the mean weight loss being 6.4% body weight. While these results are very positive, the FDA demands that weight loss drugs show that long-term usage of its drug does not cause increased risk of heart attacks or heart palpitations. The studies showed that while, “Contrave treatment did not appear to disrupt the normal circadian pattern of blood pressure,” they still have no concrete proof of long term safety.

Furthermore, studies reported that pulse increased to an average of one more beat per minute in treated patients compared to placebo patients. While this change in pulse and blood pressure is almost negligible, the sample size is too small to represent the effects of Contrave on the heart. It could very well cause heart problems in something like 1 out of 100,000 Americans that take the medication. Contrave is not as effective as Lorcaserin and Qnexa and set to be released much later than the other two. FDA approval for Contrave is the most uncertain of the three. I feel that Contrave is the least safe to invest in. I do not foresee much competition for Arena from Orexigen.

Right now it is not safe to invest in any of these companies. All of their weight loss treatments have failed FDA approval once for various reasons. My advice is to not pay attention to the positive news on VIVUS and Arena for the next few months and don’t be pulled in. The news is causing the stocks to rise in each company but there is a great chance that these non-approved drugs fail FDA regulation, which is extremely strict when reviewing weight loss drugs. Once Lorcaserin and Qnexa are approved, then it will be time to invest. My background in pharmacology has led me to the conclusion that Qnexa is the better drug and that it will overtake Arena in the battle royal.

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